EUR/USD Falls Below 1.08
The U.S. dollar gained across the board after Nonfarm payrolls data on Friday surpassed even the most optimistic of estimates showing a strong U.S. labor market. The fact that the unemployment rate rose to 4 percent appeared to fade into the background as it was not notable enough to detract from the rosy jobs and wage data. Markets therefore scaled back bets on a Federal Reserve September rate cut.
This week, the focus turns to the Federal Reserve meeting on Wednesday, where the central bank is likely to keep interest rates unchanged. However, market participants will closely watch any hints on when the Fed plans to begin cutting rates. In addition, U.S. inflation data is also due on Wednesday. Inflation remains sticky and this fact has been the Fed’s biggest consideration in altering interest rates.
As for the euro, increased political uncertainty in Europe, after voting across the European Union showed a clear shift towards right-wing and far-right parties, could also potentially dent sentiment. The EUR/USD opened today below 1.08. Dipping below 1.0760 could lead to a steeper fall and a next lower target at 1.0725.
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